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Wednesday, July 8, 2009

Paulson stadium deal funnels Portland tax money to New York

The Portland City Council is scheduled to hear tomorrow afternoon two ordinances creating a no-bid contract that turns over the remodeling of city-owned PGE Park to the Paulson family. From the documents that our correspondent obtained from the city the other day, the Paulsons apparently intend to let a construction contract worth at least $22 million to contractor giant Turner Construction, based in New York. The City of Portland, which when asked for documents says it has seen only the sketchiest of drawings and an equally cursory description of the work, will not get a chance to select any contractor other than the one chosen by the Paulsons, which in this case is apparently Turner.

It's an interesting end-run around -- or perhaps mockery of -- the public bidding laws. Here the city is about to blow big bucks on remodeling public property for the exclusive benefit of a private company -- a questionable decision in itself. But then what does it do? It has that private company put up a few million bucks up front; notes that no one else would put up that money; and for that reason awards to the company the right to designate any builder it wants.

Beyond the selection of the contractor and the price tag, there's also the question of the scope of the project. Will Portland taxpayers or their elected officials get a chance to review what's going to go into the project, to weigh in on what might be useful to have in their municipal stadium, and what might not be? Apparently not.

You have to wonder how much profit Turner will make on the deal, and whether this large public works project could have been undertaken more cheaply and with less frills. But that's all you'll get to do -- wonder. The Paulsons, recently transplanted to Lake Oswego from New York, will call all the shots.

And where will the money come from to pay for the $37 million (or greater) undertaking? Except for $4 million that the Paulsons are supposedly putting up, it will all be borrowed by the city, from the gods of Wall Street. Led by the cronies of the Paulson family at Goldman Sachs. Indeed, the contract between the city and the Paulsons states that the Paulsons will "assist" the city in privately selling the bonds. No doubt. And so all the interest on that $37 million mortgage -- and you can bet that the interest will be at a hefty rate -- will be heading for New York as well.

O.k., so no one in Portland will profit from the deal. Is there any guarantee that Portland residents will at least be hired to take the construction jobs? Nothing legally binding so far, but Turner has an office in town, and it's handled big projects in Oregon before, apparently including the last wasteful remodel of the stadium earlier this decade.

It's a bit ironic that The Paulson badmouths the existing amenities of the stadium while he goes out and hires the same contractor who got it that way to take another crack at it.

Anyway, it's to be expected that corporate and bankster America will roll into a place like Portland and try to raid the public coffers. But it's sad that they're able to do it so easily.

Comments (17)

KEX had a story yesterday saying that in the past school year 500 additional Portland students experienced homelessness owing to the economic downturn. That grabbed me. Imagine getting off school and instead of going home, you’re homeless - or picture trying to get ready to go to school in the morning under those conditions.

So what does this have to do with the soccer deal? A lot. In fact the connection’s very direct. The Paulsons are hooked in with Goldman Sachs, one of a handful of firms that caused this greed-driven meltdown.

Remember: This wasn’t a war or natural disaster that is testing our financial stability. It was a completely avoidable, incredibly reckless conversion of Wall Street into a giant casino using derivatives.

I keep telling myself the numbers so that one day I can believe them – sort of like the city council. But where theirs are hard to accept because they’re usually not true, these are hard to accept because they’re so large: 600 trillion dollars worth of these derivatives – 10 times the entire output of the world’s economy for a year.

This is what caused children in Portland to have to live in their cars or worse. And Henry Paulson actively lobbied for the freedom to make this economic meltdown happen. Then, as a member of Bush’s team, he fought to take care of his friends on Wall Street with TARP bailout money.

This secretive funneling of taxpayer money has yet to lead to a jobs recovery but it has endangered the future of the United States, as we take on the toxic assets of the bankers’ stunning greed-fest.

Yes, there has been some relief from all the misery. The handout has worked for Paulson’s buddies - Goldman Sachs has emerged with record bonuses. Meanwhile, families across America weren’t so lucky. The Paulsons of the world don’t suffer the consequences of their actions. That’s what the little people are for – to bear the brunt.

So does our city council address the fact that we now have 500 additional students out of homes? No, they rush to pour more money to the vampires who caused this and gave so many people so much pain. As with the derivatives scam, we are there to bear the risk of failure, while the Paulsons are there to make the profits.

And somewhere in Portland another kid is homeless. 500 more students this past year under all the normal pressure of growing up and going to school - while living in a car or in a shelter or on the street.

And other Portlanders who should know better - and do - stand by and applaud simply because they enjoy attending soccer games and they don’t care who’s behind the deal.

Thanks Bill. I can't agree more with your thoughts. It really is very, very sad that the city council has chosen to focus on shady stadium deals and renaming streets, than on children and schools. Forget Breedlove, it is for these reasons that I'll sign that petition. We need new leadership. Now.

It sure would be nice to get some politicians in office that arent so naive and easily manipulated. City hall seems to be the repository of the unemployable these days. When was the last time we had a mayor who actually had some business sense and was not a slave to political correctness and idealism?

Jack I believe we can come to an understanding. A few years back (4/30/2003) you were entrenched in this very same debate over MLB Baseball. You said:

"I know this is a tough sell among some constituents. We need to take care of schools before we play games, some say. But those who pit baseball against social services are missing the point of the bill. The money that would be used under HB 3606 to pay for the stadium is not money that would ever be available for schools. Without baseball, these funds simply won't exist. On the other hand, the secondary tax revenues that baseball can generate through job creation certainly would be and should be available for schools. While we attend to our problems, let's not turn our backs on the solutions.

We spend $460 million of hard state tax dollars every year for a state economic development department. Let's commit to spending $150 million of found money in a one-shot deal, and do more than that department gets accomplished in a decade.

This is a key moment for our city and state. Baseball franchises do not come up for grabs regularly, and there is now one or more ripe for the taking. Please help us take an important step forward toward bringing this economic prize home to Oregon."

"MLS is much cheaper than MLB and arguably has more support here in Portland."

OK, I think both were bad ideas with govt funding. If we would've let the tribes build a stadium/casino, that'd worked. However, our Gov can barely see past his feet.

As far as MLS having more support, what the heck does that mean? They are averaging 8000/game and at $70M debt (franchise fee and construction bond), that's $21/ticket (15 games, 6% over 30 yrs) just to pay debt back.

No, I wasn't. Major league baseball is a well established, world-class organization that actually would stimulate the local economy and provide family entertainment. "Major league" soccer is yet another bush league enterprise with a highly uncertain future, catering to a bunch of unemployed drunks with issues who like to chant curses and throw things at people.

"No, I wasn't. Major league baseball is a well established, world-class organization that actually would stimulate the local economy and provide family entertainment. "Major league" soccer is yet another bush league enterprise with a highly uncertain future, catering to a bunch of unemployed drunks with issues who like to chant curses and throw things at people."

Well if those are the only traits that separate the two issues I can't argue with that. I completely disagree with your description of MLS, which is just a little heavy on the incendiary rhetoric.

In regards to the environment you described, it sounds like a Cubs game in July if you ask me.

There are some rowdy, rude fans at all pro sports events, but what I said was, and it's true, that in "major league" soccer they are catered to. Dwight Jaynes and others have commented on this recently -- it's one of several reasons that soccer will never make it as a pro sport in the United States.

MK posted "It sure would be nice to get some politicians in office that arent so naive and easily manipulated. "

They are not naive. They are self serving creatures who wish to stay in office and who know who has the money bags to fill campaign coffers. They are also pretty much amoral given that they'd rather do this deal than provide basic social services to Portlanders in real need caused by ... capitalism at its worst .. scamming investors, scamming the Federal govt, taxpayers, etc... but hey making money (apparently no matter how you get it) is the name of the game... too bad the tightie righties can get their knickers in a wad over corporate welfare they way the do other kinds of welfare.

Road Work

Miles run year to date: 80
At this date last year: 89
Total run in 2014: 401
In 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269